Big players woo ethnic beauty market
By T. Shawn Taylor
Chicago TribuneLike many other black women, Dori Wilson spares no expense when it comes to her hair. The Chicago publicist spends as much as $10,000 a year on shampoos, conditioners, color treatments, weaves, wigs and weekly trips to the salon.
“I spend a lot of money because I don’t want to look the same all the time,” said Wilson, who believes that for black women, hair grooming is “a different discipline” and a form of self-expression.
Not every black woman has Wilson’s disposable income. But her discipline is well-known to beauty industry insiders. Black women, with their unique hairstyles and hair challenges, spend two to three times as much money on their hair as white women.
The ethnic personal-care market is a $5.1 billion industry, of which $1.6 billion is in retail, the rest in professional products and services, according to Segmented Marketing Services, based in Winston-Salem, N.C.
Numbers like that have caught the eye of mainstream beauty companies around the world, which are buying existing black-owned firms and brands to bolster their presence among black consumers. But just as the competition has increased, more black women are rebelling against a strict regimen – and the associated expense. That’s made competition for black hair-care dollars all the more intense in a market that has experienced declining sales in recent years.
“I think there’s going to be a shakeout,” said Lafayette Jones, president and chief executive officer of Segmented Marketing Services, which provides consulting for companies trying to tap into the ethnic market.
“The jury’s still out as to whether the large multinational companies have the appetite and the desire to really do what it takes to win in this category,” Jones said. “And the jury’s still out on small companies as to whether they can sustain themselves in an even more intense market.”
Interest by multinationals in the ethnic personal-care market is relatively new. For decades, large personal-care companies ignored the ethnic market, leaving it to black-owned companies. A few brands created by white-owned firm, like Dark & Lovely and African Pride, have done well. But for the most part, mainstream companies left black folks’ hair to black folks.
“White companies didn’t pay attention to black women,” said Leigh Jones, 57, a cosmetologist and owner of a Chicago salon and spa that bears his name. “They didn’t think they needed to.”
Credit globalization for the change in thinking, which imprinted cross-cultural influences on mainstream choices. But rather than develop their own lines, the leading white-owned companies entered the market through acquisitions.
“You needed somebody who was doing it and knew it,” said Sam Mattingly, assistant vice president of corporate communications for L’Oreal USA, which in 1998 bought Chicago-based Soft Sheen, maker of the Optimum Care and Mizani lines.
Among the recent deals:
Carson Inc., creator of Dark & Lovely and Magic Shave for black men, acquired black-owned beauty company Johnson Products of Chicago in 1998. L’Oreal snapped up Carson two years later and merged it with Soft Sheen.
Alberto-Culver USA acquired Pro-Line, creators of the Just for Me and Soft and Beautiful brands.
Wella Manufacturing acquired the Gentle Treatment and Ultra Sheen brands created by Johnson Products.
Bolstered by their acquisitions, mainstream companies are pouring money into marketing and research to develop new products.
In May, L’Oreal moved its ethnic personal-care division, Soft Sheen-Carson, into the former Johnson Products building in Chicago after an $8 million renovation.
“I think a lot of it had to deal with the legacy and heritage that Soft Sheen had built,” said Candace Matthews, president of Soft Sheen-Carson, of L’Oreal’s decision to stay on the South Side. “L’Oreal believes strongly in continuing that legacy.”
The beauty-products maker also has launched a new promotional campaign, featuring spokesmodel Laila Ali, a boxer like her famous father, Muhammad. Her likeness is prominently displayed in the Soft Sheen-Carson lobby.
Two years ago, L’Oreal established the L’Oreal Institute for Ethnic Hair and Skin Research in Chicago and is devoting a third of its $360 million research and development budget to black hair and skin care.
The entry of companies like L’Oreal into the black beauty business has had a big impact on small, black-owned firms that remain. For the first time in their history, these mostly family-owned businesses are competing against multinationals with more capital and clout.
While there are advantages to being large, there are also advantages to being a small firm, said Lafayette Jones, a former vice president of Johnson Products.
“They have taken a small amount of capital and leveraged that capital with liberal helpings of knowledge of where these consumers live, shop, study and worship,” he said. “What’s characterized these companies has been their relationship with this consumer.”
Some smaller companies have prospered by selling directly to salons rather than trying to compete for shelf space at major retailers like Walgreen’s.
“We’re not going to go head-to-head with these guys,” said Cornell McBride, president of McBride Research Laboratories, an Atlanta-based manufacturer of a private line of ethnic hair and beauty products. “There is a tough market out there, but I don’t see it as something we’re not going to be able to participate in.”
Still, small players are at a disadvantage when it comes to convincing national chains to give them a chance.
“You have to have a history in this industry and relations to get decent shelf space or any shelf space in major outlets,” said Venetta Coley, assistant vice president of marketing for Namaste Laboratories, a Blue Island, Ill.-based maker of products for natural black hairstyles such as dreadlocks, short Afros and braids. Namaste was founded five years ago by Gary Gardner, the son of Soft Sheen founders Ed and Bettiann Gardner.
“Gardner already had his foot in the door due to his connection with Soft Sheen,” Coley said. “But a lot of smaller companies with no connections wind up (only) in beauty supplies.”
The problem with beauty-supply stores is that they are inundated with products. Without the resources to market a brand, “it’s fruitless to put it in on the shelf and hope somebody will pick it up,” McBride said.
But beauty-supply stores do offer something that black consumers want: choice.
Alice Robinson, a 60-something beauty-conscious Evanston, Ill., resident who has a standing appointment each week at Leigh Jones, said she knows a few people who will only buy products manufactured by blacks. But to her, it’s the product that counts. “If it serves the purpose, I’m fine.”
The concept of black consumer loyalty is largely a myth accepted by people who view the black community as monolithic and narrow-minded, critics say.
“There isn’t a whole lot of product loyalty,” salon owner Leigh Jones said. “Women buy what works.”
Lafayette Jones calls black consumers some of the most discerning and sophisticated consumers around.
“If you’ve been underserved as a consumer all your life, to get ordinary things, you have to do extraordinary things. Our consumers really know how to shop for what they want,” he said. Understanding how the black consumers moves and thinks, he said, will decide who survives in the competitive beauty market. “That’s going to be the secret to this game.”
© 2002, Chicago Tribune.
Distributed by Knight Ridder/Tribune Information Services.
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